The Auditor's Responsibility for the Detection of an Illegal Act

question 20

Multiple Choice

The auditor's responsibility for the detection of an illegal act is the same as the auditor's responsibility for the detection of an error when the illegal act:

• A) creates a material contingent liability that must be disclosed.
• B) involves financial matters such as embezzlement or violations of securities laws.
• C) has a direct and material effect on the determination of a financial report amount.
• D) has consequences material to the presentation and disclosure of financial position or operating results.

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Definitions:

Normal Distribution

A balanced probability distribution centered around the mean, where data closer to the mean are seen more frequently than data considerably far from the mean.

Area

The extent or measurement of a surface or piece of land, typically measured in square units.

F Distribution

A probability distribution used in statistics, especially in analysis of variance (ANOVA), to determine the variance among sample means.

Parameters

In statistics, parameters are numerical characteristics that describe and summarize features of a population.